Northwestern (NWE) AI Stock Analysis

• Market Cap: $4.17B
• Dividend Yield: 3.89%
• Average Volume (3M): 565.81K
• Price to Earnings (P/E): 19.2
• Beta (1Y): 0.04
• Revenue Growth: 4.90%
• EPS Growth: -4.42%
• Country: US
• Employees: 1,585
• Sector: Utilities
• Sector Strength: 65
• Industry: Diversified Utilities
• EPS (TTM): 0.79
• Shares Outstanding: 61,407,030
• 10 Day Avg. Volume: 608,231
• 30 Day Avg. Volume: 565,808
• PEG Ratio: 1.07
• Price to Book (P/B): 1.15
• Price to Sales (P/S): 2.16
• P/FCF Ratio: -22.99
• Enterprise Value/Market Cap: 1.65
• Enterprise Value/Revenue: 4.38
• Enterprise Value/Gross Profit: 6.76
• Enterprise Value/Ebitda: 11.19
• 1Y Price Target: $60.50
• Price Target Upside: -9.17% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 5
• EPS Forecast (FY): 3.58
• Revenue Forecast (FY): $1.60B

• Rating: 74 Outperform
• Price Target: $74.00 ▲(11.09% Upside)

NorthWestern Energy's overall stock score of 74 reflects a solid financial foundation with strong profitability and stable growth, tempered by challenges in cash flow management and debt levels. The technical analysis supports a moderately positive outlook, while the valuation is fair with an attractive dividend yield. Positive sentiment from the earnings call and strategic corporate events further bolster the company's prospects.

Positive Factors

Strategic Mergers

The merger with Black Hills Corporation is a strategic move that can enhance market position and operational efficiencies, supporting long-term growth.

Renewable Energy Focus

A focus on renewable energy projects positions Northwestern to capitalize on the growing demand for sustainable energy, ensuring future relevance and compliance with regulatory trends.

Stable Revenue Growth

Consistent revenue growth in a regulated utility framework ensures predictable cash flows and supports long-term financial stability.

Negative Factors

Rising Debt Levels

Increasing debt levels can strain financial flexibility and may impact the company's ability to invest in growth opportunities or weather economic downturns.

Negative Free Cash Flow

Negative free cash flow indicates that capital expenditures exceed operating cash flow, potentially affecting liquidity and limiting investment capacity.

Higher Operating Costs

Rising operating costs can erode profit margins and reduce overall profitability, challenging the company's ability to maintain its financial performance.

Northwestern Business Overview & Revenue Model

Company Description

NorthWestern Corporation, doing business as NorthWestern Energy, provides electricity and natural gas to residential, commercial, and various industrial customers. The company operates through Electric and Natural Gas segments. It generates, purchases, transmits, and distributes electricity; and produces, purchases, stores, transmits, and distributes natural gas, as well as owns municipal franchises to provide natural gas service in the communities. The company operates 6,819 miles of electric transmission and 18,177 miles of electric distribution lines with approximately 400 transmission and distribution substations; and 2,166 miles of natural gas transmission and 4,945 miles of natural gas distribution lines with approximately 138 city gate stations in Montana. It also operates 1,308 miles of electric transmission and 2,320 miles of electric distribution lines in South Dakota; and 55 miles of natural gas transmission and 2,517 miles of natural gas distribution lines in South Dakota and Nebraska. The company serves approximately 753,600 customers in Montana, South Dakota, Nebraska, and Yellowstone National Park. NorthWestern Corporation was incorporated in 1923 and is based in Sioux Falls, South Dakota.

How the Company Makes Money

Northwestern generates revenue predominantly through the sale of electricity and natural gas to its customers. The company operates under regulated utility frameworks, allowing it to earn a return on investments in infrastructure and services. Key revenue streams include residential and commercial energy sales, as well as transportation and distribution fees. Additionally, NWE may engage in long-term power purchase agreements and may benefit from partnerships with renewable energy developers to diversify its energy portfolio. Regulatory decisions and energy demand dynamics also significantly influence its earnings, as they can impact pricing and operational efficiency.

Northwestern Financial Statement Overview

Summary

Northwestern's financial performance is solid with strong profitability and stable revenue growth. However, increasing debt levels and negative free cash flow pose potential risks. The company needs to improve operational efficiency and cash flow management to sustain growth.

Income Statement

Northwestern's income statement shows strong gross profit margins, consistently above 80% in recent periods, indicating efficient cost management. The net profit margin is also healthy, though slightly declining from the previous year. Revenue growth is positive, albeit modest, reflecting stable demand in the utility sector. However, the EBIT and EBITDA margins have shown some decline, suggesting potential pressure on operating efficiency.

Balance Sheet

The balance sheet reflects a moderate debt-to-equity ratio, slightly above 1, which is typical for the utility industry but indicates a reliance on debt financing. Return on equity is stable, around 7-8%, showing consistent profitability. The equity ratio is healthy, suggesting a balanced capital structure, though the increasing debt levels could pose a risk if not managed carefully.

Cash Flow

Cash flow analysis reveals challenges with negative free cash flow, indicating that capital expenditures exceed operating cash flow. This could be a concern if it persists, as it may affect liquidity. The operating cash flow to net income ratio is below 1, suggesting that not all net income is translating into cash flow. The free cash flow to net income ratio is negative, highlighting the need for improved cash flow management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.57B	1.51B	1.42B	1.48B	1.37B	1.20B
Gross Profit	1.02B	1.29B	781.36M	764.40M	946.77M	892.48M
EBITDA	614.51M	574.43M	526.15M	477.53M	471.40M	420.70M
Net Income	216.93M	224.11M	194.13M	183.01M	186.84M	155.22M
Balance Sheet
Total Assets	8.30B	8.00B	7.60B	7.32B	6.78B	6.39B
Cash, Cash Equivalents and Short-Term Investments	6.20M	4.28M	9.16M	8.49M	2.82M	5.81M
Total Debt	3.15B	3.10B	2.79B	2.63B	2.56B	2.43B
Total Liabilities	5.42B	5.14B	4.82B	4.65B	4.44B	4.31B
Stockholders Equity	2.88B	2.86B	2.79B	2.67B	2.34B	2.08B
Cash Flow
Free Cash Flow	-122.16M	-142.50M	-77.66M	-207.90M	-214.35M	-53.61M
Operating Cash Flow	401.11M	406.74M	489.23M	307.24M	219.98M	352.15M
Investing Cash Flow	-567.91M	-554.46M	-570.81M	-516.86M	-435.83M	-405.80M
Financing Cash Flow	169.39M	151.55M	84.31M	213.32M	217.52M	58.68M

Northwestern Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 66.61
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NWE, the sentiment is Positive. The current price of 66.61 is above the 20-day moving average (MA) of 66.07, above the 50-day MA of 62.80, and above the 200-day MA of 56.12, indicating a bullish trend. The MACD of 1.02 indicates Positive momentum. The RSI at 59.41 is Neutral, neither overbought nor oversold. The STOCH value of 53.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NWE.

Northwestern Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AVA	77 Outperform	$3.14B	16.39	7.31%	5.05%	2.14%	-6.51%
NWE	74 Outperform	$4.17B	19.20	7.62%	3.89%	4.90%	-4.42%
BKH	74 Outperform	$5.48B	18.33	7.90%	3.75%	7.03%	6.64%
OTTR	72 Outperform	$3.52B	12.69	16.10%	2.49%	-3.18%	-8.62%
ALE	68 Neutral	$3.94B	23.79	5.83%	4.26%	-4.30%	-8.49%
MGEE	67 Neutral	$2.93B	21.76	10.80%	2.26%	8.26%	12.47%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%

Northwestern Corporate Events

NorthWestern Energy Attends Wells Fargo Symposium

On December 9, 2025, NorthWestern Energy executives attended the Wells Fargo Energy and Power Symposium in New York to engage with investors and reaffirm their adjusted 2025 non-GAAP earnings guidance. The company also highlighted recent achievements, including regulatory approvals for a wildfire mitigation plan and a merger agreement with Black Hills Corporation. NorthWestern Energy’s strategic focus includes a $2.74 billion capital investment plan over the next five years, aimed at driving earnings and rate base growth, while maintaining a commitment to consistent dividend growth.

NorthWestern Attends EEI Conference to Reaffirm Guidance

On November 10-11, 2025, NorthWestern Energy executives will attend the 60th EEI Financial Conference in Florida to meet with investors and reaffirm their 2025 earnings guidance. The company has announced a merger with Black Hills Corporation, filed for regulatory approvals, and continues to invest in infrastructure projects, including a $300 million natural gas generation project.

NorthWestern VP John Hines Announces Retirement

John Hines, Vice President of Supply and Montana Government Affairs at NorthWestern Energy Group, announced his retirement effective February 2, 2026, after 20 years of service. His tenure included significant contributions to the company’s energy portfolio in Montana, ensuring resource adequacy and modernizing infrastructure, which have been pivotal in balancing the needs of shareholders, customers, and employees.

NorthWestern Energy Reports Q3 2025 Financial Results

NorthWestern Energy reported its third-quarter 2025 financial results, noting a decrease in GAAP EPS to $0.62 from $0.76 in 2024, primarily due to increased operating expenses and interest costs. However, the company saw an increase in non-GAAP EPS to $0.79 from $0.65 in 2024, driven by new rates and customer usage. The company reaffirmed its 2025 earnings guidance and long-term growth rates, and announced a quarterly dividend of $0.66 per share. NorthWestern Energy is advancing its merger with Black Hills Corporation, with regulatory applications submitted and a transaction close anticipated in late 2026. The company is also involved in strategic initiatives such as the acquisition of Colstrip Units 3 and 4, and supporting data center developments in Montana.

NorthWestern Energy Amends Term Loan Agreement

On September 29, 2025, NorthWestern Energy amended its Term Loan Credit Agreement, increasing the total commitment to $150 million and adding Mizuho Bank as a lender, with U.S. Bank serving as the administrative agent. The unsecured loan, due April 10, 2026, will be used for general corporate purposes and includes various covenants and conditions, such as maintaining a consolidated debt to total capitalization ratio of 65% or less.